FRANKFURT, July 30: German insurer Allianz, which owns Dresdner Bank, has ruled out a merger with Deutsche Bank, Allianz Chief Executive Michael Diekmann told German weekly magazine Der Spiegel. “From Allianz point of view, I don’t see any great benefit from taking part in a merger game with Deutsche Bank that is very much driven by investment banking business,” Diekmann said in the Spiegel report to be published on Monday.

He also said Dresdner should remain a bank rooted in Germany. “The expansion plans of German banks in Asia and north America didn’t go well. Nobody has the needed capital to keep up with the pace,” Diekmann added.

His comment came following speculation in the media that Allianz and Deutsche Bank could be good merger partners to create a truly powerful financial institution in the country.

Germany’s banking market is overcrowded and fragmented, making it difficult for the country’s banks to keep up with their international peers. Merger speculation as to who will be next to partner followed Italy’s UniCredito’s takeover offer of HVB Group, Germany’s second-biggest lender.

Deutsche has been scouring Europe for an acquisition, which a senior Deutsche Bank source described as one of Chief Executive Josef Ackermann’s key tasks. Finding a partner has not been easy, though, especially at home. A recent overture to German post-office bank Postbank was snubbed. But pressure is mounting, with an increasing number of European competitors forging links.—Reuters